The price of Bitcoin (CRYPTO: BTC) has risen 8% in the last 24 hours to trade at $66,000 U.S. as anticipation grows for the U.S. Federal Reserve to begin cutting interest rates this September.
Bitcoin has posted its biggest single-day gain in nearly two months as weak U.S. inflation data raised expectations that the U.S. central bank will start lowering interest rates by the autumn.
The move higher in the past 24 hours is the largest percentage rise seen in Bitcoin since March 20 of this year.
Like other risk assets, Bitcoin is sensitive to interest rates and tends to rally when the cost of borrowing money declines or is expected to decline.
Data released on May 15 showed that U.S. inflation and retail sales in April each came in lower than analysts and economists had expected, indicating that the U.S. economy is slowing and bolstering the case for lower interest rates.
A majority of futures traders now expect the Fed to deliver a 25-basis point rate cut in September of this year.
Traders are also betting that the Bank of England, Bank of Canada, and the European Central Bank will each lower rates in June.
The Swiss National Bank and Sweden’s Riksbank have already cut their benchmark interest rates and eased the cost of borrowing in those countries.
Monetary easing is positive for risk assets such as Cryptocurrencies, spurring the current rise in Bitcoin’s price.
Traders and analysts expect that lower interest rates will provide a boost to both stocks and cryptocurrencies in this year’s second half.
Bitcoin’s price has risen 50% this year.